- The consolidation of digital media accelerated in 2021.
- European publishing giants Axel Springer and Future have been very buying in recent months.
- Insider asked experts which European digital media companies could be bought out next.
The digital media mergers and acquisitions market has been booming with activity in 2021.
While the European media sector has not seen the same wave of deals as in the United States, media powerhouse players like Future and Insider parent company Axel Springer have been very buying.
The volume of private equity deals in the European media and news services sector is also trending towards a record annual pace this year – 143 European PE-media deals closed in the third quarter alone – according to Pitchbook. And as American players like BuzzFeed and Forbes go public and accept new funding, they may well be looking across the Atlantic as they seek to expand their audiences.
Nico Lumma, managing partner of Hamburg-based NMA Venture Capital, said he believes large pan-European content startups have a great opportunity, but it is difficult to convince investors to pledge for the millions of people. dollars in financing required – which could make these businesses attractive to potential buyers.
“Content has limits, mostly territorial or language barriers,” Lumma said. But, he added: “I think there is so much potential for startups that scale a little faster than the old print publishers.”
Insider spoke to eight experts – a mix of bankers, media insiders, analysts, consultants, venture capitalists, and M&A advisers – who identified six European digital media companies that are preferred acquisition targets, which we have classified in alphabetical order. (To be clear, they didn’t say the companies were involved in ongoing sales talks.)
The companies declined to comment or did not respond to requests for comment for this story, unless otherwise noted.
Funding raised: $ 127 million
Effective : 250
Founded in Paris four years ago, Brut produces short-lived news and entertainment video content for young audiences in five different languages and various social media platforms. The company also recently launched a subscription at 4.99 euros per month.
service called BrutX in France this year.
“They do a really phenomenal job with the video, which is really in your face and attracts thousands of comments, ”said Nico Lumma, Managing Partner and NMA Venture Capital, a Hamburg-based startup accelerator.
This summer, Brut raised $ 75 million in Series C from leading investors, including James Murdoch’s Lupa Systems, Artémis Group, Tikehau Capital, Orange Ventures. The company said it would use the funds to accelerate its expansion in the United States, India and Africa and to expand its content offering around cultural and social issues.
“I can see Brut fitting easily into a broadcast network or publishing company,” said Bernard Urban, CEO of Branded Content Strategic Investments.
Originally founded in 2010 as a collaboration between several specialist French publishers, Izneo offers an online catalog of comics and graphic novels on its app and the Nintendo Switch for $ 7.99 per month. Since 2016, the company has also been jointly owned by the French distribution chain Fnac.
The company’s CEO, Luc Bourcier, has a background in video games and launched the Sega brand in France in 1988.
While the service is similar to Comixology operated by Amazon, which offers comics from Marvel and DC, Izneo offers more international rates and could be a compliment to a big American player in the space.
Thierry Baujard, the Berlin founder of European investment firm Media Deals, said Izneo was “growing strongly” and was “the leading provider” in Europe for webtoon content.
Total funding: $ 4.3 million, according to Crunchbase
Effective : 164
Konbini is a French news media and pop culture brand that produces articles and videos for its site and various social media platforms.
Konbini’s main Snapchat and Instagram accounts have around 2 million followers each, while his Facebook account has amassed over 4 million likes.
The 13-year-old is also home to an advertising agency that creates content for brands.
Abeed Janmohamed, founding partner of growing consulting firm Volando Global, said Konbini may generate interest because of its mobile-first and millennial focus.
“They’re more of a news house than just a publisher and quite interesting because they picked an audience and surrounded that audience with everything,” from brand-focused content to sports and the arts, he added.
Total funding: Approximately $ 7.6 million
Workforce: Around 30
Just two years after co-founding the German member-funded Krautreporter news site, Sebastian Esser and Philipp Schwörbel launched Steady in 2016.
The Berlin-based tech company offers tools such as a content management system, podcast hosting platform, and technology to integrate paywalls and membership programs to other publishers. Steady takes a 10% fee from publishers’ gross monthly revenues.
Partner editors have included Gay Times, The Quietus, and Gal-dem. The company said it reached the milestone of 100,000 members paying over € 10 million to 1,000 publishers last year.
“I think they’re on to something good, but haven’t got the scale yet,” Lumma said.
Steady closed on Monday a € 2.5 million ($ 2.9 million) round of funding led by Trafo Investment, Gaingels and its existing investor Müller Medien.
“Although the designer industry is very dynamic at the moment, we believe that the best is yet to come in our home market, Europe; we see enormous potential for growth, ”said a spokesperson for the company. “We are therefore not currently pursuing acquisitions.
Telegraph media group
Acquired: For £ 665million ($ 919million at today’s exchange rate) by the Barclay brothers in 2004
Effective : 1148 to 3 January 2021
Founded in the 1800s, the owner of British newspaper The Daily Telegraph is unlike the other European “startups” on our list.
But experts including Ian Whittaker, an independent media analyst, said The Telegraph has marked strong digital growth in recent years and growing profitability. Moreover, he would have been in the block for a long time, he added.
The Telegraph said it reached 500,000 digital paid subscribers in October, up 30% from the start of 2021. Its website saw 38 million visits in August, according to Similarweb.
A person close to the company said the Telegraph’s cost-cutting campaign over the past two years could indicate it is gearing up for a sale. The news headline recently outsourced its print ad sales to Mail Metro Media and shut down its Spark-branded content division last year.
Lifted: £ 600,000 ($ 828,000) from Kickstarter, plus initial working capital from seed investors
Effective : 60
“Slower, wiser news” is the motto of Tortoise Media, a British member-funded investigative journalism operation launched in 2019.
Tortoise offers a range of membership plans – from £ 100 per year to £ 450 per year – which provide access to ad-free articles, newsletters, podcasts and its interactive “ThinkIns” live events with its journalists and guests specials. The company now has 130,000 members, a mix of paying, those funded through its outreach program and experimenters, according to a spokesperson.
The company has a trio of prominent founders: James Harding, the former director of BBC News and before that the editor of The Times of London, is the editor of the site; Katie Vanneck-Smith, former president of the Wall Street Journal and the Dow Jones, is the publisher of Tortoise; and the former US ambassador to Sweden and the UK, Matthew Barzun, is the chairman.
Rob Ristagno, founder of consultancy firm Sterling Woods, said Tortoise was “ripe for choice” for a bigger publisher who hasn’t yet figured out how to add non-ad revenue streams.
“Tortoise burned the boats by never accepting publicity and therefore only thinks about how to support the business with public revenue,” said Ristagno. “Their ThinkIns are a new format for consumers to engage and feel like part of a community – and community building is another trend traditional publishers are striving to improve. “